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Income Taxes | 9 Months Ended
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Mar. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | 13. Income Taxes On March 27, 2020, the Coronavirus Aid, Relief and Economic Security, or CARES, Act was enacted and signed into law. As of this filing, we do not believe the CARES Act will have a material impact on the income tax provision for the fiscal year ended June 30, 2020. We account for income taxes under the asset and liability method. The provision for income taxes recorded in interim periods is recorded by applying the estimated annual effective tax rate to year-to-date income before provision for income taxes, excluding the effects of significant unusual or infrequently occurring discrete items. The tax effects of discrete items are recorded in the same period that the related discrete items are reported and results in a difference between the actual effective tax rate and the estimated annual effective tax rate. The provision for income taxes of $10.2 million and a benefit of $15.3 million for the three months ended March 31, 2020 and 2019, respectively, represented estimated federal, foreign, and state income taxes. The effective tax rate for the three months ended March 31, 2020 diverged from the combined U.S. federal and state statutory tax rate primarily because of foreign withholding taxes, income taxed at higher tax rates, the impact of accounting for qualified stock options and global intangible low-taxed income, or GILTI, partially offset by the benefit of research credits and foreign tax credits. The effective tax rate for the three months ended March 31, 2019, diverged from the combined U.S. federal and state statutory tax rate, primarily because of foreign withholding taxes, the impact of accounting for qualified stock options, foreign deemed paid taxes, foreign income taxed at higher tax rates, and GILTI, partially offset by the benefit of research credits, foreign tax credits, and foreign-derived intangible income deduction. The provision for income taxes of $17.3 million and the benefit for income taxes of $8.1 million for the nine months ended March 31, 2020 and 2019, respectively, represented estimated federal, foreign, and state income taxes. The effective tax rate for the nine months ended March 31, 2020 diverged from the combined U.S. federal and state statutory tax rate primarily because of foreign withholding taxes, income taxed at higher tax rates, the impact of accounting for qualified stock options and GILTI, partially offset by the benefit of research credits and foreign tax credits. The effective tax rate for the nine months ended March 31, 2019, diverged from the combined U.S. federal and state statutory tax rate, because of foreign withholding taxes, the impact of accounting for qualified stock options, foreign deemed-paid taxes, foreign income taxed at higher tax rates and GILTI, partially offset by the benefit of research credits, release of reserves related to uncertain tax positions, the impact of net shortfalls in share-based compensation deduction, foreign tax credits and foreign-derived intangible income deduction. The total liability for gross unrecognized tax benefits related to uncertain tax positions increased $2.2 million during the nine months ended March 31, 2020, to $21.1 million from $18.9 million at June 30, 2019, and was included in other long-term liabilities on our condensed consolidated balance sheets. If recognized, the total gross unrecognized tax benefits would reduce the effective tax rate on income from continuing operations. Accrued interest and penalties related to unrecognized tax benefits as of March 31, 2020 were $2.0 million; this balance increased by $0.1 million compared to June 30, 2019. We classify interest and penalties as components of income tax expense. It is reasonably possible that the amount of the liability for unrecognized tax benefits may change within the next twelve months and an estimate of the range of possible changes includes an increase in our liability of up to $2.5 million. In February 2020, Altera Corporation filed a petition for a writ of certiorari asking the Supreme Court to review the Ninth Circuit Court of Appeals’ decision that reversed the 2015 decision of the U.S. Tax Court in Altera Corp. v. Commissioner, which found that Treasury regulations addressing the treatment of stock-based compensation in a cost sharing agreement with a related party were invalid. As of March 31, 2020, there has been no response from the Supreme Court. As our tax filing position is consistent with the Treasury regulations, no adjustment to our financial statements is required. However, due to uncertainties with respect to the ultimate resolution of this case, we will continue to monitor developments in this case. Our major tax jurisdictions are the United States, Hong Kong SAR, and Japan. From fiscal 2013 onward, we remain subject to examination by one or more of these jurisdictions. In August 2018, we received the revenue agent’s report resolving the fiscal 2014 and fiscal 2015 examination by the Internal Revenue Service with no material impact on our condensed consolidated financial statements. Our case was reviewed by the Joint Committee on Taxation, which concluded in September 2019 with no further impact to our condensed consolidated financial statements.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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